Oregon’s home health care industry faces major federal cuts; access cited

Home health care providers in Oregon and their allies say their industry is in a bind. The state’s rural home health providers don’t make as much as they should from serving Medicare patients, and the state’s providers overall are slated for an even bigger hit next year, according to the industry’s advocates and allies in Congress.

Last week, Oregon’s Congressional delegation signed a letter to Marilyn Tavenner, administrator of the Center for Medicare and Medicaid Services, asking her to adjust the 2013 reimbursement rates for the state’s rural home health providers, saying unusually low wages at one rural hospital in Coos Bay had unfairly brought down the wage index used to set federal reimbursement the entire state’s rural home health sector — amounting to a six percent cut. The index is based on wages at seven rural hospitals.

“We hope you would agree that it is imprecise to use such inconsistent data while establishing rates for providers as far as 538 miles away from one another, regardless of whether it amounts to higher or lower payments. In fact, the drive from Enterprise to Coos Bay is longer than the drive from Baltimore, Maryland to Cincinnati, Ohio,” said the delegation’s June 4 letter. The letter was signed by Oregon’s one Republican Congressman, Rep. Greg Walden, as well as its six Democrats, Sen. Ron Wyden and Jeff Merkley, and Reps. Earl Blumenauer, Peter DeFazio, Kurt Schrader and Suzanne Bonamici.

Tavenner has not yet responded. The outlier hospital was not named, but Coos Bay is home to Bay Area Hospital.

Meanwhile, on Wednesday a national group representing the home health industry released a report indicating that Oregon’s home health profit margins have been the hardest hit by recent federal cuts, cuts that could grow larger under a new rule authorized by the Affordable Care Act. Specifically, the Partnership for Quality Home Healthcare commissioned a report from a consulting firm working with Avalere Health and found that under a federal formula, home health providers in Oregon are slated to record a nearly 9 percent overall loss by 2017 in a “best case” scenario.

That figure places Oregon among the five states facing the largest negative impact of the new rules. Other scenarios under the new rule could lead to even bigger projected losses, the group says, adding that losses will translate to reduced access to care for Medicare beneficiaries. The final version of the new federal rule is expected to be released in the next couple of weeks.

According to the group, 21,161 Medicare beneficiaries in Oregon receive care from more than 3,500 home health workers employed by 56 companies. Nearly one-half of these agencies serve patients living in rural areas.